How India can seize the foreign investment opportunity
India finds itself in an intensifying global competition for foreign investment to create good jobs, upskill workers, infuse technology, and ultimately fuel its economic growth. This high-stakes race is brimming with ambitious entrants, and the complacent risk being left behind.
Fortunately, India’s appeal as an investment destination is growing according to some metrics. Last December, India’s commerce ministry reported that total foreign direct investment flows climbed to $1 trillion since April 2000. According to the government, gross foreign direct investment (FDI) rose to $55.6 billion last April-November, a 17.9% year-on-year increase over the same period. World-class companies like Apple are investing more in the country’s future. Its global share of iPhones made in India is expected to surge from 15 to 25% by 2027, according to JPMorgan and Bank of America.
Yet, look more closely, and the foreign investment picture is not all roses. Gross FDI inflows have experienced only modest growth over the last decade, while net FDI inflows reportedly hit a 12-year low in April-October 2024. What does this mean? Global businesses are not investing enough in India. And, when they do, companies seem to be pulling their profits out of the country, rather than reinvesting them. According to World Bank data, FDI as a share of India’s Gross Domestic........
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